The United States and Japan will step up their defence cooperation to deal with the threat from nuclear-armed North Korea as tensions in East Asia remain high, officials from the two allies said on Thursday.

WA premier flags tax hike, blames GST

Taxes may rise in Western Australia if the state's share of GST continues to slide, West Australian Premier Colin Barnett warns.

Mr Barnett said he was dismayed but not surprised by the federal budget's confirmation that WA's projected slice of GST returns will fall from 55 cents in the dollar to 45 cents in the coming financial year.

If the slide continued, the state government would have to raise taxes, he said.

"If that comes to pass, and I hope it doesn't, we will have no choice but to significantly increase taxes in this state," he told reporters on Wednesday.

Mr Barnett also denied he had reneged on election pledges about transport infrastructure after admitting that the planned metropolitan light rail network and the heavy rail link to the airport would not both be finished by 2018 as originally flagged.

The commonwealth allotted $500 million in funding over ten years for either project in Tuesday's budget, and Mr Barnett said the state government would prefer to put the money towards the airport rail line, which would probably be easier to deliver.

He said there were several tricky aspects of the light rail plan to iron out - not least the City of Perth objecting to tram lines running through pedestrian malls - and indicated the WA government would consider Mayor Lisa Scaffidi's suggestion to run them instead along the main business thoroughfare, St Georges Terrace.